Gas miner Metgasco's surprise announcement on November 2 that it was recommending its shareholders accept a $25 million payout for its three remaining exploration licences in NSW's Northern Rivers, near Lismore, was celebrated right across the state.
Anti-fracking campaigners, who have worked hard for more than three years, educating, organising and mobilising communities against the industry, are very relieved.
“It's a good decision,” regional coordinator for Gasfield Free Northern Rivers Dean Draper told Green Left Weekly. “Metgasco could never have set up shop here given the community-wide opposition to the industry.”
As Green Left Weekly has reported, 87% of Northern Rivers' residents opposed CSG mining at the 2012 council elections, and since then the opposition has grown to closer to 97%.
However, Metgasco was holding out on its petroleum exploration licences (PELs) 16, 13 and 426 — the first being the site of a mass community blockade last year. It was only when it became apparent in May last year that not even the NSW police were prepared to break the Bentley blockade that energy minister Anthony Roberts ordered the suspension of Metgasco's licence.
Infuriated, Metgasco, backed by the industry body, the Australian Petroleum Production and Exploration Association (APPEA), challenged that suspension in the NSW Supreme Court and, in April, won the case. Since then, Metgasco had been holding out against the NSW government's offer to buy the remaining licences.
On September 1, it announced it was taking the government to court for damages over Bentley. It also said it was resuming its work in the Northern Rivers, and expected the NSW police to provide it with security. It appeared the government's buy-out wasn't working.
So, when Metgasco announced to the Australian Securities Exchange that its board had unanimously accepted the NSW government's offer to buy back the three licences for $25 million (including compensation) and that it will urge shareholders to accept the deal at its AGM on November 30, community activists were relieved.
But it was not the total sum, or some clever negotiating tactic, that won the day.
As Draper told a celebratory gathering in Lismore on November 2: “The true heroes of this win are the communities — the farmers, the Knitting Nannas and everyone else. People power forced the government to listen. The power base of National Party MP Thomas George and other Nationals MPs were threatened. That was the reason the government listened.”
Ross Joseph, a landholder who lives in the area of one of the licences said: “We're grateful to the government for finally acting to cancel these licences, and for stopping the drilling at Bentley last year.
“More than that, we're just proud of our community for coming together to turn away unsafe and unwelcome industrialisation of our beautiful region.”
Draper told GLW: “We would have preferred the three licences had been cancelled because we want long-term permanent protection” and there is no law guaranteeing that.
He was also concerned about the enormous amount of public money being handed to Metgasco. Metgasco recorded a $3.8 million loss in 2014–15 and its total equity is $8 million. Managing director Peter Henderson takes a salary of $612,000, down from $705,000 the previous year.
Under the NSW government's Gas Plan, other PELs have been bought back for around $212,000 and, in this case, PEL 426 had already expired.
Under the Petroleum (Onshore) Act 1991 a petroleum title may be cancelled — without compensation — on a number of grounds including contravention of conditions and failure to use the title area in good faith for the purpose for which it was granted.
While there is no law protecting sensitive parts of the state — water catchments and prime agricultural land — from the industry, Draper said in any case that would only be partial protection as “any new government could also change the law”.
“The best long-term protection in the Northern Rivers is a mobilised community,” he said. The statewide campaign to protect NSW from this toxic industry now has to focus on helping the Gloucester and Camden communities in their battle against AGL and to protect the Pilliga from Santos. A Lock the Gate meeting in Lismore on November 14–15, will discuss this.
NSW Greens mining spokesperson Jeremy Buckingham told Green Left Weekly: “The writing is on the wall for this toxic industry.
“The Greens support a complete ban on the industry: it is clearly unsafe for residential areas, unsafe for farming and it is uneconomic.”
Buckingham said that when the NSW Labor Party brings back its bill for a moratorium on unconventional gas in NSW, the Greens will seek to amend it back to its original — prohibition — bill.
“Since 2011, the gloss has come off the industry in Queensland and now in NSW. The Australian unconventional gas industry has a huge vulnerability: it is expensive and the operation brings out a lot of waste water that the industry still has no way of dealing with.
“The global oil glut and the subsequent downturn in the price of gas means that “making money out of unconventional gas is very difficult ... Dart Energy, APEX, Metgasco and others have all given up.”
Reflecting on Metgasco's announcement, he said: “This is a historic victory for people power, which through unity and determination has ejected this toxic industry from their community.
“Metgasco and the NSW government have been dragged kicking and screaming to this position. If the government had been listening, rather than trying to implement quick political fixes, it may have been able to stop coal seam gas without having to pay out so much taxpayer's money.
“Twenty five million dollars is a large sum and we should question whether Metgasco's failures should be compensated in this way. However, $25 million is not a lot considering it will protect the land, water, communities and other industries of the Northern Rivers and will give people long-term certainty.”